6 Reasons Why You Should Pay for Everything on a Credit Card

Credit cards get a bad rap sometimes when you hear of massive credit card debt, high-interest debt, and people with spending problems. That is not the fault of credit cards but more of an issue with the spender. 

Credit cards can be great tools for building credit, reaping the rewards, and getting purchase insurance. 

Hearing that you should pay for everything on a credit card may sound like a bad idea, but if you can stick to your regular spending habits, using a credit card outshines the benefits of a debit card or cash. The key is ensuring not to overspend and pay off your bill at the end of each month. Here are 6 reasons why you should pay for everything on a credit card.

1. Rewards and Bonuses

Many credit cards allow you to get a percentage back on your spending. These come in the form of rewards and bonuses. Cash-back credit cards are a great way to get back cash on the things you buy, and many of these cards can have a significant percentage back, like a 2% flat rate on everything. Some bigger bonus cards can get up to 4% or 5% back on travel, gas, or groceries categories. 

The huge plus is the welcome bonuses that can come with credit cards. Many of these cards will have a welcome bonus that can go from $100 to up to $1,000 if you spend a certain amount of money in the first three months. That can be huge. 

Credit card bonuses have helped travelers travel for cheaper and find great deals by using points and miles to grab some free and discounted flights. 

2. Build Your Credit Score

One of the most benefits of using credit cards is building up that credit score. It allows banks and creditors to see how responsible you are with borrowing money. Every time you use a credit card, you are borrowing money. Then when you pay it off, you are paying off that loan. 

One other thing that affects your credit is credit utilization. If you can keep your spending to 30% or lower of your credit limit, that looks good to creditors and banks. So that is another way to help boost your credit score. So the more credit you have and the less you use, the better. If you have a $3,000 credit limit and only use $900, that is good for your credit score.

3. Price Protection

Many of credit cards offer price protections and warranties on items. These can include:

• Purchase Protection from 90-120 days if an item is broken or stolen. 
• Cellphone insurance for bills that are paid by the card
• Extended warranty on items purchased by the card
• Travel Protections

All of these items help ensure that your purchases are protected. 

4. Travel and Emergency Insurance

Some travel credit cards you can obtain have essential travel and emergency insurance. They can come with rental car insurance, trip delay, trip cancellation, and even lost luggage insurance. That is a great thing to put peace of mind as you travel. You know that there are some insurances out there that can cover unexpected things as you globetrot around the globe. 

5. Tracking and Budgeting Expenses

Credit Card spending can also be helpful in tracking and budgeting expenses. The credit card with categorize all the purchases, and you can use apps like YNAB (You Need a Budget) or Mint, download a spending PDF and upload them into these apps. 

It is a great way to see what you spend most of your money on and how you can cut or spend wiser.

6. Convenience

Credit cards make life convenient. You do not have to look for cash in your pocket; you can pull out a piece of plastic and make it happen. Even apps like Apple Pay and Google Pay use credit cards to make life even more accessible. Just tap your phone, and you have paid for an item. 

Bottom Line:

Credit cards may not be for everyone, but they give many people peace of mind. It helps build credit for people. They reward those that use them through cash back or reward points. They also have many protections that help people in all sorts of situations.